Britain's GDP hammered by Brexit, analysts find

'Brexit has had a sizeable negative impact on Britain’s economy,' report author says

A pro-EU campaigner in London on October 22. EPA

Brexit has cost Britain 5.5 per cent of its national GDP, estimates published on Wednesday indicated.

Since the country left the EU, investment was down 11 per cent and goods trade 7 per cent lower, but services trade, for the first time, showed no change, analysis from the Centre for European Reform found.

The London think tank’s estimates are for the period from Brexit to the second quarter of this year.

“Brexit has had a sizeable negative impact on Britain’s economy,” report author John Springford said.

“This has inevitably led to tax rises, because a slower-growing economy requires higher taxation to fund public services and benefits.

"If Brexit had not happened, most of the tax rises that then chancellor Rishi Sunak announced in March 2022 would not have been necessary.

“Tax revenue would have been about £40 billion higher on an annual basis, and Sunak announced tax rises of £46 billion.”

The shortfalls in GDP and investment are about the same as estimates produced by CER for the fourth quarter of last year.

CER said the effects of Covid-19 were not skewering the results.

All 22 countries in the study had almost entirely reopened by June and yet Britain continued to trail behind.

The goods trade shortfall narrowed to 7 per cent from 13.6 per cent last time, but CER said because the sector was volatile, it was too soon to tell whether UK traders had started to shrug off the trade barriers.

Since 2018, the CER has published its estimates of the effect of Brexit on the UK’s economy.